Newsprint tariff puts pressure on newspapers

Craig Horleman

3 months ago

UPDATE, Wednesday, August 29 — The International Trade Commission reached a final, unanimous decision that the U.S. paper industry is not harmed by imports of Canadian uncoated groundwood paper, including newsprint.

The decision means that the tariffs levied over the past few months will stop, and the cash deposits from those tariffs will be refunded to newsprint manufacturers (though that will take several months). The ITC will release a final report on September 17 that will clarify it’s reasoning on this issue.

DOVER — Late this month, we hope to hear good news from the International Trade Commission.

It seems odd, for a Delaware newspaperman, to write such a lead to this column.

But, the reality is that the Delaware State News and everyone else in the newspaper industry is facing one of its greatest challenges in the form of a tariff on uncoated groundwood paper coming from Canada.

Newsprint costs are up 30 percent and the effects have been well-documented around the country in recent months.

Newspapers have cut editions. In Maryland, the Easton Star-Democrat and the Cecil Whig have eliminated Monday papers.

Rural newspapers in some places have shut down after decades of service and there will be no local news in those towns. Good luck finding coverage of town hall on Facebook and Google in those places.

Some large preprint advertisers are cutting circulars.

Many large newspapers — including ones like the Pulitzer Prize-winning one in Tampa, Florida — have laid off scores of journalists. Paper, of course, is one of two major costs in this business. The other is personnel.

One North Carolina newspaper recently cut the funnies in its Sunday editions.

Here at the Delaware State News, we always hope that you, the reader, do not feel our stress.

It’s the news and information that you seek, so we’re striving to do our best not to let this impact our core readership and our advertisers.

One immediate reaction we had was to make sure we’re printing the right amount of papers and getting them in the hands of the people who want them.

So why is this happening?

Dodge County, Wisconsin, publisher and soon-to-be president of the National Newspaper Association Andrew Johnson wrote about this in a recent column. Here’s an excerpt that explains the tariff.

“The paper we print on is newsprint, known in the industry as uncoated groundwood paper. Most of it comes from Canada. Although there are five paper mills in the U.S. that make this paper, American newspapers have also used Canadian paper for more than a century. It simply isn’t possible in the continental U.S. to make enough newsprint to supply the needs of U.S. newspaper readers.

“Last January, the Department of Commerce slapped a tax, better known as a tariff, on this Canadian paper, and then hit it again in March. The government was responding to a lawsuit by a single paper mill, owned by a New York investment firm, alleging that the Canadian competition was affecting its profits. The ITC allowed the tax to stay in place while it investigates. For much of this year, American publishers have been receiving continual price increases from their printers, who have been trying all year to adjust to tariffs of more than 30 percent on the paper they use to print our editions. In early August, the federal government said the tariffs could be lowered somewhat in September, but they still would be about 20 percent. This newsprint price increase is very hard for small town newspapers to absorb.

“It is the ITC that ultimately decides whether these tariffs will continue at all. Its job is to figure out whether tariffs would help U.S. producers. U.S. producers — the five U.S. mills — certainly face challenges. But those come from the fact that most large newspapers have cut back on paper usage dramatically. There is less demand for newsprint in the U.S., so lower prices have resulted. It is not unfair competition, but natural market forces, while digital editions take over the larger newspaper world that affect the papermakers.”

The Delaware State News invited U.S. Sen. Tom Carper, D-Del., to our printing plant this week to discuss the challenges.

He and U.S. Sen. Chris Coons, D-Del., and U.S. Rep. Lisa Blunt Rochester may contact the International Trade Commission in advance of their decision in late August.

Besides the International Trade Commission decision, there was legislation introduced in May in the U.S. Senate that calls for a suspension of the tariff while the Commerce Department studies its impact. The Senate bill has the bipartisan support of 31 senators. A companion bill was introduced in the U.S. House. No action has been taken on those bills and it is unlikely any will be. Members of the Delaware delegation have not signed on as sponsors.

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As a journalist and as a citizen, what is most troubling beyond the economics is the threat this presents to the strength of America’s free press and the First Amendment.

Can you imagine small towns and communities with no one to keep a watchful eye, no one to break down issues, no one to champion progress and no place to debate those opinions and share ideas?

In a packet she shared, she wrote, “Our members are deeply involved in their communities, providing valuable exposure to charitable organizations, pro bono advertising, and discussing and analyzing critical issues. If tariffs drive these publications out of business, or dramatically decrease their ability to cover local news, society as a whole will suffer. Without the press functioning as the skeptical watchdog, the level of accountability to the public and to each other diminishes.”

The tariff matter has not deterred the Delaware State News from its mission.

We’ll do all we can to continue to report on local news and serve as the state capital’s newspaper “of, by and for” the community.

In times like these, we want you to know that we appreciate your support and continued readership.